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First Uranium Corporation - Mine Waste Solutions submits six month interim financial statements to the JSE Limited

29.12.2011  |  CNW

TORONTO AND JOHANNESBURG, Dec. 29, 2011 /CNW/ - First Uranium Corporation

(ISIN:CA33744R1029) ('First Uranium') announced today that in connection with the continuous disclosure obligations under the rules of the JSE Limited ('JSE'), Mine Waste Solutions (Proprietary) Limited ('MWS') issued its unaudited interim abridged consolidated financial statements (the 'Financial Statements') for the six month period ended 30 September, 2011.

As a wholly-owned subsidiary of First Uranium, the results of MWS and its wholly-owned subsidiary, Chemwes (Proprietary) Limited were included in First Uranium's unaudited consolidated financial statements and related Management's Discussion and Analysis for the three and six months ended September 30, 2011.

Attached is the notice issued on SENS by MWS together a copy of the MWS's Financial Statements.

MWS listed its 11% secured convertible notes due 31 March 2013 on the JSE on 15 July 2011.

29 December 2011

Cautionary Language Regarding Forward-Looking Information

This news release contains and refers to forward-looking information based on current expectations. All other statements other than statements of historical fact included in this release are forward-looking statements (or forward-looking information). First Uranium's plans involve various estimates and assumptions and its business and operations are subject to various risks and uncertainties. For more details on these estimates, assumptions, risks and uncertainties, see the First Uranium's most recent Annual Information Form and most recent Management Discussion and Analysis on file with the Canadian provincial securities regulatory authorities on SEDAR at www.sedar.com. These forward-looking statements are made as of 9 November 2011 and there can be no assurance that such statements will prove to be accurate, such statements are subject to significant risks and uncertainties, and actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements that are included herein, except in accordance with applicable securities laws.

Mine Waste Solutions (Proprietary) Limited

(Incorporated in the Republic of South Africa)

(Registration number 2000/1443/07)

(a wholly-owned subsidiary of First Uranium Corporation)

JSE code MWNT ISIN: ZAE000156261

29 December 2011

Attached are the unaudited interim abridged consolidated financial statements of Mine Waste Solutions (Proprietary) Limited for the six months ended September 30, 2011 (2012 YTD).

As previously reported on SENS on November 15, 2011, First Uranium Corporation (First Uranium) issued its unaudited consolidated financial statements and related Management's Discussion and Analysis ('MD&A') for the three and six months ended September 30, 2011. As a subsidiary of First Uranium, the results of Mine Waste Solutions (Proprietary) Limited and its wholly-owned subsidiary, Chemwes (Proprietary) Limited ('Chemwes') were included in the results for the First Uranium group. Mine Waste Solutions together with Chemwes are referred to herein as MWS. The six months ended September 30, 2010 is referred to as 2011 YTD.

Basic and diluted loss and headline loss per common share

(extracted from Mine Waste Solutions' interim abridged consolidated financial statements for the six months ended September 30, 2011)





30 September 30 September
2011 2010
R R

Basic and diluted loss and headline loss
per
share of (cents per share in Rand) (1 179.82) (563.89)

is calculated based on the loss and
headline
loss for the six months of (in Rand) (448 330 202) (214 278 531)

and a weighted average number of common
shares outstanding of 380 000 380 000



Overview of Mine Waste Solutions

(extracted from First Uranium's MD&A for the three and six months ended September 30, 2011)

MWS increased its gross profits for 2012 YTD (US$25.7 million) by 47% compared to 2011 YTD (US$17.5 million), as a result of higher revenues generated by the tailings operation.

The 55% higher tonnage throughput in 2012 YTD (9.7 million tonnes) compared to 2011 YTD (6.3 million tonnes) was driven primarily by the commissioning of the new tailings storage facility ('TSF'), which along with the third gold plant module in April 2011, increased processing capacity from an average of 1.2 mtpm to 1.8 mtpm. The final gold expansion phase of the MWS project during 2012 YTD brought with it three new resources, the Hartebeestfontein tailings dams #1, 2 and 7.

The material characteristics of the new resources necessitated modifications to both the carbon-in-leach and the elution circuit to enable the infrastructure to accommodate the larger fraction size of the new material. The modifications undertaken during the period impacted negatively on gold recoveries in 2012 YTD compared to 2011 YTD. During the period under review, MWS improved the performance of the third gold plant module significantly such that overall gold recoveries improved resulting in an average recovery of 51% for the three months ended September 30, 2011 and 48% for 2012 YTD.

The 62% increase in gold proceeds in 2012 YTD (US$65.2 million) compared to 2011 YTD (US$40.3 million) was primarily driven by the 31% higher average gold selling prices along with the 27% increase in gold ounces sold over the comparative period. Amortization in 2012 YTD also increased compared to 2011 YTD as a result of the increased tonnage profile.

The 34% increase in Cash Costs* in 2012 YTD (US$673 per ounce) compared to 2011 YTD (US$501 per ounce) were driven by several factors, namely:


-- The high unit cost of operating the Hartebeesfontein # 7
satellite dam (including trucking) which are important in
managing the grade and fraction size mining mix reporting to
the third gold module reclamation station;
-- Additional power costs of running the new TSF, which is
situated approximately 16km from the metallurgical complex;
-- Additional water costs resulting from less than planned return
water reporting from the TSF to the reclamation operations and
the resultant need to supplement water from more expensive
sources. The need to supplement water will reduce in time as
the dam begins to fill and is less affected by evaporation.

The higher revenues in 2012 YTD more than offset the higher costs in the respective period and resulted in the 47% increases in gross profits generated by MWS compared to 2011 YTD.

The successful completion of the critically important Franco-Nevada Technical Completion Test, as required in terms of the gold purchase agreement between Chewmes (Proprietary) Limited, First Uranium Corporation, Franco-Nevada (Barbados) Corporation (formerly Gold Wheaton (Barbados) Corporation) and Franco-Nevada GWL Holdings Corp. (successor to Gold Wheaton Gold Corp.), on August 24, 2011 was a significant milestone for MWS and removes a significant commercial risk for this operation.

At the end of 2012 YTD, the capital program for the third gold plant module as well as the TSF was fundamentally complete with minor trailing obligations remaining. All contracts related to the execution of these capital programs are likely to be closed out along with final settlement during the three months ended December 31, 2011.

*'Cash Costs' are costs directly related to the physical activities of producing gold and uranium and include mining, processing and other plant costs; third-party refining and smelting costs; marketing expense, on-site general and administrative costs; royalties; on-mine drilling expenditures that are related to production and other direct costs. Sales of by-product metals such as uranium and silver are deducted from the above in computing cash costs. Cash costs exclude depreciation, depletion and amortization, corporate general and administrative expense, exploration, interest, and pre-feasibility costs and accruals for mine reclamation. Cash costs are calculated and presented using the 'Gold Institute Production Cost Standard' applied consistently for all periods presented. The Gold Institute was a non-profit industry association comprised of leading gold producers, refiners, bullion suppliers and manufacturers. This institute has now been incorporated into the National Mining Association. The guidance was first issued in 1996 and revised in November 1999. Total cash costs per ounce is a non-IFRS measurement and investors are cautioned not to place undue reliance on it and are advised to read all IFRS accounting disclosures presented in the Corporation's Financial Statements.

Reserves and Resources

The mineral reserve and resources for MWS estimates as of April 1, 2011 are available on the website of First Uranium Corporation at www.firsturanium.com. There have been no material changes to the mineral reserve and resource estimates since such date.

Annual Financial Statements

The audited annual consolidated financial statements of MWS for the year ended March 31, 2011 is available on the First Uranium website at www.firsturanium.com under Investor Centre/ Annual Reports.

Cautionary Language Regarding Forward-Looking Information

This news release contains and refers to forward-looking information based on current expectations. All other statements other than statements of historical fact included in this release are forward-looking statements (or forward-looking information). The Company's plans involve various estimates and assumptions and its business and operations are subject to various risks and uncertainties, including without limitation, the outcome of the appeal of the Water Use License by FSE. For more details on these estimates, assumptions, risks and uncertainties, see First Uranium's most recent Annual Information Form and most recent Management Discussion and Analysis on file with the Canadian provincial securities regulatory authorities on SEDAR at www.sedar.com. These forward-looking statements are made as of 9 November 2011 and there can be no assurance that such statements will prove to be accurate, such statements are subject to significant risks and uncertainties, and actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements that are included herein, except in accordance with applicable securities laws.

Non-IFRS Measures

The Company believes that in addition to conventional measures prepared in accordance with International Financial Reporting Standards ('IFRS'), the Company and certain investors and analysts use certain other non-IFRS financial measures to evaluate the Company's performance including its ability to generate cash flow and profits from its operations. The Company has included certain non-IFRS measures in this document. Non-IFRS measures do not have any standardized meaning prescribed under IFRS, and therefore they may not be comparable to similar measures employed by other companies. The data is intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS. Readers are advised to read all IFRS accounting disclosures presented in the Company's financial statements for more detail.

Mine Waste Solutions

INTERIM ABRIDGED CONSOLIDATED RESULTS OF MINE WASTE SOLUTIONS (UNAUDITED)

The historical financial information of Mine Waste Solutions (Proprietary) Limited (the 'Company' or 'Mine Waste Solutions' or 'MWS') has been extracted from the unaudited interim consolidated financial statements of the Company for the six months ended 30 September 2011. These extracts are the responsibility of the Board. Please refer to the Management Discussion and Analysis of First Uranium Corporation, the ultimate holding company of MWS, for the three and six months ended 30 September 2011, for commentary on the financial information of MWS.

ABRIDGED CONSOLIDATED STATEMENT OF FINANCIAL POSITION



30 31
September March

2011 2011

Notes R R

ASSETS

Non-current assets

3 477 347 3 452
Property, plant and equipment 2 663 107
865

43 411 38
Environmental rehabilitation trust fund 943 769
178

529 082 321
Deferred tax asset 123 261
015

4 049 841 3 812
729 138
058

Current assets

462 875 335
Loans to group companies 3 415 189
151

25 331 38
Cash and cash equivalents 074 473
337

34 107 50
Trade and other receivables 533 154
630

25 845 18
Inventories 177 202
931

548 159 442
199 020
049

4 598 000 4 254
Total assets 928 158
107

EQUITY AND LIABILITIES

Equity

89 147 89
Share capital 994 147
994

45 431 46
Convertible notes 5 329 750
880

13 426 12
Reserves 750 286
772

(724 948 (276
Accumulated loss 216) 618
014)

(576 942 (128
143) 432
368)

Non-current liabilities

2 398 428 1 985
Derivative financial liability 4 595 271
170

1 651 079 1 578
Loans from group companies 3 746 500
038

386 105 387
Convertible notes 5 090 578
798

215 305 210
Environmental rehabilitation provision 629 711
112

4 650 919 4 162
060 061
118

Current
liabilities

64 536 51
Loans from group companies 3 617 540
920

76 239 81
Trade and other payables 103 113
670

381 929 86
Derivative financial liability 4 922 556
398

Current tax payable 1 318 369 1 318
369

524 024 220
011 529
357

5 174 943 4 382
Total Liabilities 071 590
475

4 598 000 4 254
Total Equity and Liabilities 928 158
107



ABRIDGED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

for the six months ended



30 30
September September

2011 2010

Notes R R

Revenue 419 505 270 227
272 309

Cost of sales (206 007 (127 835
151) 896)

Gross profit 8 213 498 142 391
121 413

Other 2 021 312 343 721
income

Derivative expense related to MWS

Gold Stream Transaction 9 (738 008 (342 982
310) 387)

Franco-Nevada penalty 7 - (3 138
846)

Other expenditures (32 926 (28 949
686) 994)

Operating loss (555 415 (232 336
563) 093)

Investment 854 481 2 090 841
income

Interest and accretion expense 10 (93 612 (34 004
036) 295)

Accretion on environmental

rehabilitation provision (4 623 (4 594
074) 518)

Foreign exchanges gains (losses) (3 355 (4 489
119) 246)

Loss before taxation (656 151 (273 333
311) 311)

Taxation 207 821 59 054
109 780

Loss for the period (448 330 (214 278
202) 531)

Other comprehensive 455 178 150 558
income

Total comprehensive loss (447 875 (214 127
024) 973)

Attributable to the owners of the

Parent

Loss for the period (448 330 (214 278
202) 531)

Other comprehensive 455 178 150 558
income

(447 875 (214 127
024) 973)

Basic and diluted loss per share

(cents per share) 14 (1 (563.89)
179.82)



ABRIDGED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

for the six months ended 30 September 2011



Share Share Total
share

Capital premium capital

R R R

Balance at 1 April 2011 380 89 147 614 89 147
994

Total comprehensive loss for the period - - -

First Uranium: Parent contribution - - -

Equity portion of value of Rand Notes

converted to common shares in First

Uranium Corporation - - -

Balance at 30 September 2011 380 89 147 614 89 147
994

Equity Share

portion of based

convertible payment Fair
value

notes reserve reserves

R R R

Balance at 1 April 2011 46 750 880 11 517 159 769 613

Total comprehensive loss for the period - - 455 178

First Uranium: Parent contribution - 684 800 -

Equity portion of value of Rand Notes

converted to common shares in First

Uranium Corporation (1 319 551) - -

Balance at 30 September 2011 45 431 329 12 201 959 1 224
791

Note 5

Total Accumulated Total

reserves loss equity

R R R

Balance at 1 April 2011 12 286 772 (276 618 (128 432
014) 368)

Total comprehensive loss for

the period 455 178 (448 330 (447 875
202) 024)

First Uranium:Parent contribution 684 800 - 684 800

Equity portion of value of Rand

Notes converted to common shares

in First Uranium Corporation - - (1 319
551)

Balance at 30 September 2011 13 426 750 (724 948 (576 942
216) 143)



ABRIDGED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

for the six months ended 30 September 2010



Share Share Total share

Capital premium capital

R R R

Balance at 1 April 380 89 147 614 89 147 994
2010

Total comprehensive loss for the - - -
period

First Uranium: Parent - - -
contribution

Equity portion of convertible
notes
on

issue of Rand - - -
Notes

Balance at 30 September 380 89 147 614 89 147 994
2010

Equity Share

portion of based

convertible payment Fair value

notes reserve reserves

R R R

Balance at 1 April - 6 535 706 368 875
2010

Total comprehensive loss for the - - 150 558
period

First Uranium: Parent - 2 835 966 -
contribution

Equity portion of convertible
notes

on issue of Rand 50 346 776 - -
Notes

Balance at 30 September 50 346 776 9 371 672 519 433
2010

Note 5


Total Accumulated Total

reserves loss equity

R R R

Balance at 1 April 2010 6 904 581 (46 916 522) 49 136 053

Total comprehensive loss for the

period 150 558 (214 278 (214 127
531) 973)

First Uranium: Parent

contribution 2 835 966 - 2 835 966

Equity portion of convertible

notes on issue of Rand - - 50 346 776
Notes

Balance at 30 September 2010 9 891 105 (261 195 (111 809
053) 178)



Although the group reflect a net liability position, it is not deemed technically insolvent as the derivative liability (note 12) is based on estimated production which provides a higher fair value of the cash generating mining assets.

ABRIDGED CONSOLIDATED STATEMENT OF CASH FLOWS

for the six months ended                       



30 30
September September

2011 2010

Notes R R

Cash flows from operating activities

Cash generated from operations 18 251 099 138 752
255 751

Cash interest 854 481 2 090 841
received

Cash interest paid 5 (23 023 (21 951
274) 559)

Net cash generated by operating

activities 228 930 118 892
462 033

Cash flows from investing
activities

Purchase of property, plant and equipment (110 687 (326 100
128) 566)

Increase in rehabilitation trust funds (4 216 (2 240
142) 573)

Net cash utilised in investing

activities (114 903 (328 341
270) 139)

Cash flows from financing activities

Net proceeds from the issue of

convertible - 278 558
notes 190

Net cash movement on loans to/from

related companies (127 169 46 676
455) 367

Net cash from financing activities (127 169 325 234
455) 557

Total cash movement for the period (13 142 115 785
263) 451

Cash at the beginning of the period 38 473 44 981
337 676

Total cash at end of the 25 331 160 767
period 074 127



NOTES TO THE CONDENSED FINANCIAL INFORMATION

1. Presentation of Financial Statements

The unaudited interim consolidated financial information has been prepared in accordance with International Accounting Standards (IAS) 34: Interim Financial Reporting, JSE Listing Requirements, the AC 500 standards as issued by the Accounting Practices Board or its successor and in the manner required by the Companies Act of South Africa. The interim consolidated financial information should be read in conjunction with the annual financial statements for the year ended 31 March 2011. These financials have been prepared in accordance with International Financial Reporting Standards and presented in South Africa Rand, the Company's functional currency.

2. Property, plant and equipment



Cost Accumulated Carrying
Depreciation Value

30 September 2011 R R R

Buildings 20 674 (323 407) 20 351
655 248

Mining assets 3 616 (227 853 3 388 378
232 381 598) 783

Furniture and fixtures 5 204 (1 714 756) 3 490 107
863

Motor vehicles 4 430 (2 160 081) 2 270 316
397

Computer equipment and software 2 095 (1 610 397) 485 502
899

Tailings for processing 70 444 (8 072 863) 62 371
570 707

Total 3 719 (241 735 3 477 347
082 765 103) 663

Cost Accumulated Carrying
Depreciation Value

31 March 2011 R R R

Buildings 20 674 (269 725) 20 404
655 930

Mining assets 3 545 (183 470 3 362 025
495 216 164) 052

Furniture and fixtures 5 204 (1 293 440) 3 911 423
863

Motor vehicles 4 354 (1 730 422) 2 624 317
739

Computer equipment and software 2 095 (1 325 463) 770 436
899

Tailings for processing 70 444 (8 072 863) 62 371
570 707

Total 3 648 (196 162 3 452 107
269 942 077) 865

Reconciliation of property, plant and equipment

Opening Additions Disposals
For the six months ended Balance

30 September 2011 R R R

Buildings 20 404 - -
931

Mining assets 3 362 70 737 166 -
025 051

Furniture and fixtures 3 911 - -
423

Motor vehicles 2 624 75 658 -
317

Computer equipment and software 770 436 - -

Tailings for processing 62 371 - -
707

3 452 70 812 824 -
107 865

Depreciation Closing
For the six months ended Balance

30 September 2011 R R

Buildings (53 683) 20 351
248

Mining assets (44 383 434) 3 388 378
783

Furniture and fixtures (421 316) 3 490 107

Motor vehicles (429 659) 2 270 316

Computer equipment and software (284 934) 485 502

Tailings for processing - 62 371
707

(45 573 026) 3 477 347
663

Reconciliation of property, plant and equipment

Opening Additions Disposals
For the six months ended Balance

30 September 2010 R R R

Buildings 20 512 2 550 377 -
296

Mining assets 2 794 303 224 265 -
555 174

Furniture and fixtures 4 593 - -
892

Motor vehicles 3 545 258 000 (164 817)
599

Computer equipment and software 1 245 - -
805

Tailings for processing 65 368 - -
229

2 889 306 032 642 (164 817)
820 995

Depreciation Closing
For the six months ended Balance

30 September 2010 R R

Buildings (53 682) 23 008
991

Mining assets (19 199 819) 3 078 579
620

Furniture and fixtures (407 150) 4 186 742

Motor vehicles (328 068) 3 310 714

Computer equipment and software (306 480) 939 325

Tailings for processing (1 693 501) 63 674
728

(21 988 700) 3 173 700
120

Opening Additions Disposals
Balance

For the year ended 31 March 2011 R R R

Buildings 20 512 - -
296

Mining assets 2 794 610 457 004 -
555 173

Furniture and fixtures 4 648 13 947 -
022

Motor vehicles 3 545 - (164 817)
600

Computer equipment and software 1 191 20 850 -
675

Tailings for processing 65 368 - -
229

2 889 610 491 801 (164 817)
820 995

Depreciation Closing
Balance

For the year ended 31 March 2011 R R

Buildings (107 366) 20 404
930

Mining assets (42 987 125) 3 362 025
052

Furniture and fixtures (750 546) 3 911 423

Motor vehicles (756 466) 2 624 317

Computer equipment and software (442 089) 770 436

Tailings for processing (2 996 522) 62 371
707

(48 040 114) 3 452 107
865

Capitalised expenditure for the six months ended 30

September 2011 2010

R R

Decommissioning asset raised - 22 720
454

Share based compensation capitalised 684 798 2 835 966

Interest on Facility with Simmer and Jack Mines,

Limited - 1 759 886

Interest on Loan from First Uranium Limited

capitalised 11 676 576 70 278
809

12 361 374 97 595
115



The company has considered any significant changes and a potential decline in the market value of the assets. No indication existed pertaining to an impairment of the assets of the company.

A register containing the information required by paragraph 22(3) of Schedule 4 of the Companies Act is available for inspection at the registered office of the company. These assets are encumbered as set out in Note 4, Derivative financial liability and Note 5, Convertible notes.

3. Loans to (from) group companies



30 31
September March

2011 2011

R R

Holding company

(64 536 (51
First Uranium Corporation 617) 540
720)

This loan is interest free and has no

fixed repayment terms.



(1
First Uranium Limited - Luxembourg Branch (1 651 578
079 746) 500
038)

This loan bears interest at the South

African banking institutions prime

lending rate and is repayable on or before

31 May
2012.



71 089 69
First Uranium (Proprietary) Limited 022 258
556

This loan is interest free and has no

fixed repayment terms.



Fellow subsidiaries



Ezulwini Mining Company (Proprietary)

391 786 265
Limited 393 830
595

This loan is interest free and has no

fixed repayment
terms.

(1
(1 252 294
740 948) 851
807)

462 875 335
Current assets 415 189
151

(1
Non-current liabilities (1 651 578
079 746) 500
038)

(64 536 (51
Current liabilities 617) 540
920)

(1
(1 252 294
740 948) 851
807)



As there are no fixed repayment dates, the loans from group companies (excluding the loan from First Uranium Limited - Luxembourg Branch) have been disclosed as current and the carrying amounts therefore approximate the fair values.

4. Derivative financial liability

Gold Wheaton (Barbados) Corporation (GW) was a wholly owned subsidiary of Gold Wheaton Gold Corp. (GLW). On 14 March 2011, Franco-Nevada Corporation acquired all of the outstanding common shares of GLW that it did not already own and GLW amalgamated with a wholly owned subsidiary of Franco-Nevada

Corporation to form Franco-Nevada GLW Holdings Corp. (FNGLW) and GW changed its name to Franco-Nevada (Barbados) Corporation (FN). Consequently, going forward in the financial statements of the Corporation all references to GLW and GW will be FNGLW and FN, respectively.

On 1 December 2008, MWS, through its wholly-owned subsidiary Chemwes, signed a definitive agreement with Franco Nevada (FN), whereby FN acquired the right to receive 25 percent of the life-of-mine production from MWS (the MWS Gold Stream Transaction). Under the terms of the agreement, FN paid MWS US$125 million upfront. In addition, FN will make an ongoing payment equal to the lesser of US$400 per ounce (the Fixed Price) (subject to an annual inflation adjustment of 1 percent, starting in the fourth year after following receipt of the first payment) and the prevailing sport price per ounce, at the time the gold is delivered by MWS under the contract.

This transaction is classified as a derivative financial liability and accounted for as such. The financial liability is fair valued using the Black Scholes pricing model. All cash received and cost of production relating to the delivered ounces are recognised as part of the derivative expense related to the Gold Stream Transactions along with the revaluation effects of the financial derivative liability.

During the six months ended 30 September 2011 MWS delivered 12,151 (30 September 2010: 10,436; 31 March 2011: 19 873) ounces to FN. The cash received and cost of sales related to the ounces delivered to FN as well as the effects of revaluing the financial derivative liability at the end of the year were recognised in the statement of comprehensive income.

Under the terms of the MWS Gold Stream Transaction, the upfront payment is reduced by an amount equal to the difference between the market price of gold on the date of gold delivery to FN and the Fixed Price of the gold multiplied by the total ounces of gold delivered to FN (the Uncredited Balance). At 30 September 2011 the Uncredited Balance was R462 million (31 March 2011: R812 million).

Pursuant to the MWS Gold Stream Transaction, MWS granted to FN a special bond over certain of the tailings dams and a pledge of 25% of the gold production from MWS. First Uranium has guaranteed the obligations owed by MWS to FN.

Pursuant to the Offering, the Corporation settled the completion penalty obligation to FN in respect of the MWS Gold Stream Transaction with the issuance of 14 million common shares of First Uranium to FN and a commitment by the Corporation to complete construction of the third gold plant module at MWS and satisfaction of the Technical Completion Test pursuant to the MWS Gold Stream Transaction prior to 1 September 2011. MWS was able to complete the first phase of the Technical Completion Test which entailed MWS reaching Steady-State Production. The second phase entailed meeting certain key criteria with respect to tonnes of material processed, average feed grade to the plant and gold recovery for a minimum continuous period of 14 days. The second phase of the test was successfully completed on 24 August 2011 with subsequent confirmation received from FN on 29 August 2011. The successful completion of the Technical Completion Test prior to 1 September 2011 avoids the imposition of the penalties provided under the MWS Gold Stream Transaction in connection with the test.

The derivative financial liability is fair valued using the Black Scholes model. The following assumptions were used for the valuation at 30 September 2011:

* Strike price of US$400 per ounce of gold

* Gold price at the end of the reporting period of US$1,631

* Volatility of 30% on the gold price

* 3 month US Libor rate - 0.2446

* Gold lease rates as at the time of valuations - 0.01

* Life of mine expected gold production



30 31
September March

2011 2011

R R

2 071 827 1 467
Balance, beginning of the period 568 982
865

Delivery of gold to settle the derivative

(108 926 (130
liability 630) 160
249)

Fair value loss on derivative 817 457 734
liability 579 004
952

2 780 358 2 071
Balance, end of the period 517 827
568

2 398 428 1 985
Non-current liabilities 595 271
170

Current 381 929 86 556
liabilities 922 398

2 780 358 2 071
517 827
568



5. Convertible notes

On 26 April 2010 First Uranium Corporation, MWS's ultimate holding company, concluded a private placement offering (the Offering) of Cdn$150 million in senior secured convertible notes due 31 March 2013 (the Notes). The Notes issued consisted of R296.1 million in South African Rand denominated Notes (the Rand Notes) issued by MWS and Cdn$110million in Canadian dollar denominated Notes (the Canadian Notes) issued by First Uranium Corporation.

Each Rand Note has a principal amount of R1 000 and will be convertible into 107.36 common shares in First Uranium Corporation, also representing a conversion price of R9.31. The Rand Notes were issued by MWS and if elected by the holders, upon conversion the holders of these notes will receive common shares in First Uranium Corporation at point of conversion.

The Notes are guaranteed by the subsidiaries of First Uranium Corporation, secured by second ranking security over all assets in the First Uranium group currently encumbered by Franco Nevada and first security over all other current and future assets of the First Uranium group. The Notes will not be redeemable until maturity and are subject to typical anti-dilution protections.

In connection with the Offering and in addition to the Notes issued, Simmer and Jack Mines, Limited (Simmer & Jack) also exchanged its R167.8 million outstanding facility (see Note 6, Facility with Simmer & Jack) as at 26 April 2010 (including accrued and unpaid interest) for 167,812 Rand Notes on 26 April 2010.

Also in connection with the Offering, First Uranium Corporation settled the completion penalty obligation to FN pursuant to the MWS Gold Stream Transaction with the issuance of 14 million common shares in First Uranium Corporation to FN and a commitment by the Corporation to complete construction of the third gold plant module at MWS and satisfaction of the technical completion tests prior to 1 September 2011.

The liability component of the Rand Notes is being accreted such that the liability at maturity will equal the gross amount payable or convertible at maturity. The rate applied to calculate the liability portion of the Rand Notes was 15.5%.

The equity component of the Rand Notes (R50 million) was calculated as the balance between the face value and the liability value of the Rand Notes.

Conversion of Rand Notes

During the six months ended 30 September 2011, 12,207 (31 March 2011: 33,084) of the Notes were converted into 1,311,169 (31 March 2011: 3,553,227) common shares of First Uranium. No notes were converted into common shares during the six months ended 30 September 2010. At 30 September 2011, the total number of Notes outstanding was 418,605 (31 March 2011: 430,812) of which Simmer & Jack held 392 681.



30 31 March
September

2011 2011

R R

Balance, beginning of the 387 578 -
period 798

Gross proceeds received with regards to
the

Rand Notes pursuant to the - 296 084
Offering 000

Facility with Simmer & Jack settled with
Rand

Notes (Note 6, Facility with Simmer & - 167 812
Jack) 000

Reallocate equity portion of the Rand - (50 346
Notes 776)

Cost of issuing the Rand - (17 525
Notes 810)

Convertion of Rand Notes into common
shares in

First (11 159 (30 378
Uranium 337) 075)

Interest and accretion expense for the
period

(Note 32 708
10) 903 67 233 515


Interest payments made during the (23 023 (45 300
period 274) 056)

Balance, end of the 386 105 387 578
period 090 798



6. Facility with Simmer & Jack

On 14 August 2009, MWS, through its holding company, First Uranium (Proprietary) Limited finalised a one-year term credit facility of R160 million with Simmer & Jack (the Facility). First Uranium (Proprietary) Limited advanced the funds raised through the Facility with Simmer & Jack immediately to MWS's wholly-owned subsidiary, Chemwes (Proprietary) Limited and entered into a back-to-back loan arrangement with Chemwes effective the same date and on the same terms and conditions as the Facility with Simmer & Jack. Amounts borrowed under the facility bore interest at the three-month Johannesburg Interbank Agreed Rate (JIBAR) for South African Rand denominated loans plus 7% per annum. The capitalised costs included an arrangement fee of 3% of the Facility amount. Undrawn amounts were subject to commitment fees of 2.8% per annum. MWS drew down the total Facility amount at inception of the Facility and thus no commitment fees were paid. The Facility with Simmer & Jack including the unpaid interest on the facility was settled in full on 26 April 2010 with the issue of 167,812 Rand Notes to Simmer & Jack (Note 5).



30 September 31 March

2011 2011

R R

Balance, beginning of the - 166 052 724
period

Interest expense accrued until 26 - 1 759 276
April 2010

Facility settled with the issue of
Rand Notes

(Note 5, Convertible - (167 812
notes) 000)

Balance, end of the - -
period



7. Franco-Nevada penalty

The MWS Gold Stream Transactions (Note 4, Derivative financial liability) originally provided for a $42 million penalty payment if construction on expansion of a third gold plant was not completed by 1 June 2010.

Pursuant to the terms of the Offering (Note 5, Convertible notes), First Uranium Corporation agreed to settle the $42 million completion penalty obligation in respect of the MWS Gold Stream Transaction with the issuance of 14 million common shares in First Uranium Corporation valued at R135 million to FN and a commitment by First Uranium Corporation to complete construction of the third gold plant module at MWS and satisfaction of the Technical Completion Tests (as noted below) prior to 1 September 2011 (Note 4, Derivative financial liability).

On 31 March 2010, MWS provided for R132 million of the FN penalty and on 26 April 2010 provided for a further R3 million through the Statement of Comprehensive Income in order to account for the settlement of the FN penalty with the issuance of 14 million common shares in First Uranium Corporation valued at R135 million on 26 April 2010.

8. Revenue and cost of sales

Revenue consists of gold sold. Revenue and cost of sales increased as a result of a 23% increase in gold sold compared to the six months ended 30 September 2010. Revenue was further aided with a 23% increase in the average Rand gold spot price (R360,600 per kilogram for the six months ended 30 September 2011 compared to R294,024 per kilogram for the comparative period).

9. Derivative expense related to MWS Gold Stream Transaction



30 September 30 September

2011 2010

R R

Cash received from gold delivered
into MWS

Gold Stream 34 142 597 28 336 130
Transaction

Cost of production related to gold
delivered

into MWS Gold Stream (63 619 958) (40 852 612)
Transaction

Fair value loss on derivative (708 530 (330 465
liability 949) 905)

(738 008 (342 982
310) 387)



10. Interest and accretion expense



30 30
September September

2011 2010

R R

Interest and accretion expense (Note (32 708 (34 004
5) 903) 295)

Interest on First Uranium Limited -
Luxembourg

Branch (60 903 -
loan 133)

(93 612 (34 004
036) 295)



11. Commitments



30 September 31 March

2011 2011

R R

Capital commitments

Property, plant and 18 059 434 28 904 875
equipment



The capital commitments are payable within one year.

12. Related parties



Relationship

Ultimate holding company: First Uranium Corporation

Holding company: First Uranium (Proprietary) Limited

Fellow subsidiary: Ezulwini Mining Company (Proprietary)

Limited

Related companies: Simmer and Jack Mines, Limited

Buffelsfontein Gold Mines Limited

Directors: GP Wanblad

ARL Kgomongwe

JS Danana

DT van der Mescht

E Oosthuizen





Related party balances 30 September 31 March

2011 2011

R R

Loan accounts - Owing (to) by related

parties:

First Uranium Corporation (64 536 617) (51 540
971)

First Uranium (Proprietary) Limited 71 089 022 69 262
874

First Uranium Limited (1 651 079 (1 578
746) 500 038)

Ezulwini Mining Company (Proprietary) Limited 391 786 393 265 930
595

Convertible notes Liability portion related to

Rand Notes issued to Simmer & Jack (362 205 (353 278
185) 074)



Related party transactions

30 September 30
September

2011 2010

R R

Shared services and management fees

paid to:

Simmer & Jack 109 113 646 540


Buffelsfontein Gold Mines - 5 000
Limited

First Uranium Corporation 1 364 639 4 006 222



Royalties paid
to:

Simmer & Jack with regard to Aberdeen royalty

agreement 5 589 870 3 544 674

Buffelsfontein Gold Mines Limited 5 589 870 3 563 180



Share-based payments related to share

options granted by First Uranium 684 798 2 835 966
Corporation



Interest and accretion expense to:

Simmer & Jack pursuant to the Facility with

Simmer & - (1 759
Jack 276)

Simmer & Jack related to Rand Notes issued to

Simmer & Jack (30 152 970) (34 004
295)

First Uranium Limited on the loan from
First

Uranium Limited - Luxembourg Branch (72,579,709) (70 278
809)



13. Directors' emoluments



30 30
September September

2011 2010

R R

Fees paid for services as director

ARL - 20 000
Kgomongwe



14. Basic and diluted loss per common share



30 September 30 September

2011 2010

R R

Basic and diluted loss and headline
loss per

share of (cents per share in (1 179.82) (563.89)
Rand)

is calculated based on the loss and
headline

loss for the six months of (in (448 330 202) (214 278 531)
Rand)

and a weighted average number of
common

shares outstanding 380 000 380 000
of



15. Net asset value and net tangible asset value per share



30 September 31 March

2011 2011

R R

Net liability value per share (1 518.27) (294.23)
(cents)

Net tangible liability value per (2 910.59) (756.39)
share(cents)



Net liability (576 942 143) (111 809 177)
value

Net tangible liability (1 106 024 266) (287 426 400)
value



Net asset (liability) value is calculated as total assets less total liabilities at the end of the financial period. Net tangible asset (liability) value is calculated as total assets (excluding deferred tax asset) less total liabilities (excluding deferred tax liability) at the end of the financial period.

16. Dividends

No dividends have been declared or proposed during the six months ended 30 September 2011 and 2010.

17. Segmental reporting

The company is currently operating the gold and uranium tailings recovery project in Stilfontein. At present only gold is produced. All revenue reflects gold sold to Rand Refinery in South Africa. This operation is treated as one operating segment. The information reviewed by the chief operating decision maker is the same as the information provided in the primary statements and therefore no separate reporting segments have been identified.

18. Cash generated from operations



30 30
September September

2011 2010

R R

Loss before taxation (656 151 (273 233
311) 311)

Adjusted for:

Depreciation and amortisation 45 573 21 988
026 700

Investment income (854 481) (2 090
841)

Accretion on environmental rehabilitation

provision 4 623 074 4 594 518

Interest and accretion expense 93 612 34 004
036 295

Non-cash portion related to derivative expense

of MWS Gold Stream Transaction 708 530 330 465
949 905

Franco-Nevada - 3 138 846
penalty

Changes in working
capital

Decrease (increase) in inventories (7 642 4 116 072
246)

Decrease in trade and other receivables 16 047 3 275 668
097

Increase in trade and other payables 47 361 12 492
111 899

251 099 138 752
255 751



 

First Uranium Corporation

CONTACT: Mary Batoff

Vice President, Legal

Suite 1210, 141 Adelaide Street West

Toronto, Ontario, Canada M5H 3L5

mary@firsturanium.ca



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